Tesco Says Fresh & Easy Seeking to Reassure Shoppers Over Stores

Feb. 1 (Bloomberg) -- Tesco Plc, the U.K.’s largest grocer,
said a message to customers of its unprofitable U.S. Fresh &
Easy unit was to reassure them about the future of the business
rather than a response to a defection of shoppers to rivals.

“We talk to customers regularly,” said Tom Hoskin, a
spokesman for Cheshunt, England-based Tesco, which said Dec. 5
it would likely exit the U.S. “In this case, we were reassuring
Fresh & Easy’s customers that, while they might have seen that
we are carrying out a review, stores are open and trading.”

Investment bank Greenhill is undertaking a strategic review
of Fresh & Easy for Tesco, which plans to communicate progress
in April when it presents full-year results. Tesco has
invested 1 billion pounds ($1.6 billion) in the U.S. business,
which hasn’t made a profit since it was formed in 2007.

“A strategic review always causes uncertainty, with
competitors unnerving staff and customers,” said Clive Black,
an analyst at Shore Capital in Liverpool, England. “So I’m
surprised this campaign has taken as long as it has.”

In the message on its Facebook page, Fresh & Easy sought to
downplay concern over the future of its 199 stores.

“We know there’s still a lot of interest and curiosity
around the future of Fresh & Easy,” the chain said. “We
appreciate the love. While we don’t know exactly what the
outcome of this strategic review process will be, we want to
assure you we don’t have plans to close stores and we’re
confident Fresh & Easy can continue to be your favorite
neighborhood market. In fact, we’re kicking off a new campaign
this week so keep an ear out for our new radio spots.”

The Orange County Register newspaper in California reported
yesterday that Fresh & Easy had e-mailed the message to
customers.

Tesco said in December that approaches were made in recent
months for all and part of Fresh & Easy, which has stores in
Nevada, California and Arizona.

“Tesco will want to ideally sell Fresh & Easy as a going
concern and it does not want to jeopardize that,” Black said.